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Tuesday, August 24, 2010

Grow Jobs ... Shrink Government

In his op-ed "Grow Jobs, Shrink Government" (Boston Globe, August 18, 2010) Mitt Romney claims that the Republicans have other ideas apart from the "cut taxes" mantra.

A careful examination of the nine items in the brief agenda laid out by Mitt Romney show that three were revenue neutral (negotiate trade agreements, those these might result in tariff reductions; adopting an energy policy that reduces dependence on middle east oil, though Romney gives no indication of what such a policy might be and whether it would be acceptable to other Republicans; preserve our balanced labor and management rules and regulators), one would increase taxes (eliminate lobbyist inspired loopholes), one is ambiguous on the effect on taxes (align corporate taxes with other developed economies, but I assume he expects a reduction), while four unequivically involve reductions in taxes (preserve the Bush tax cuts, that will be a cut from the anticipated 20011 rates; accelerated write-offs for corporate investments; eliminate tax on dividends; eliminate tax on capital gains and interest).

It is clear that the more specific parts of Romney's program involve tax cuts. He never makes clear which government programs should be curtailed to avoid an increase in the National Debt.

Saddest of course is Romney's failure to note that policies similar to these were what the Republicans followed during eight of the last ten years that Romney deplores.

Sent to Boston Globe

Take Back Government from Corporations

Cambridge Chronicle Op-Ed

Tuesday, August 17, 2010

Foreclosure Crisis

A recent news story (US Plans more aid for jobless homeowners, August 11, 2010) and John Carney's Op-Ed on Fannie Mae and Freddie Mac (Too big not to fail, August 11, 2010) contain the seeds of a good idea for the solution to the foreclosure crisis. Mr. Carney notes that overlooked suggestions for reform include encouraging banks to partner with homeowners in shared appreciation mortgages. Included in the additional aid are funds to enable "local aid groups to provide [interest free] bridge loans of up to $50,000 to eligible borrowers to help them pay mortgage principal, interest, insurance, and taxes for up to 24 months.

Let us combine these two ideas into a government financed and administered program. Our experience going through middle men for the government guaranteed student loan program was an expensive mistake.

Let the government absorb Fannie Mae and Freddie MAc and give them a new role. Entering into shared appreciation mortgages with distressed homeowners. With this version of a shared appreciation mortgage, the homeowner would pay what he or she could, the government would pay the rest.

With such a scheme there would be multiple winners:
* mortgage holders would get their promised stream of payments,
*government would finally get some traction in reducing the rate of foreclosures -- nothing has worked so far because getting multiple mortgage holders to agree on modifying the terms of a mortgage is virtually impossible; over time government might even build up some positive equity in the houses it co-owned,
* homeowners would continue to live in their homes,
*towns and cities would continue to enjoy vibrant neighborhoods.

All around it seems a sensible way to go.

Bureaucratic Failure in the case of Shirley Sherrod

The indecent haste with which the Department of Agriculture engineered Ms. Sherrod's
resignation suggests a major failure in the bureaucratic protections that the Federal
Government has in place for its employees.

To be fired without any attempt to hear her side of the story, without a full
consideration of all the facts suggests gross incompetence in senior management of the

They should be disciplined.